Taxpayers Alert! Not only Rs 5 lakh, but Rs 10 lakh can be your tax-free income now; Here’s how

Taxpayers Alert! Not only Rs 5 lakh, but Rs 10 lakh can be your tax-free income now; Here’s how

The Interim Budget 2019 has introduced various sops for the salaried taxpayers which can be availed in the Financial Year 2019-20. As per the budget proposals, annual income up to Rs 5 lakh has now been made tax-free. However, very few people are aware of this fact that if someone plans his tax affairs smartly, then he can earn tax-free income up to Rs 10 lakh!

Further, if a person possesses two house properties and he is upset due to paying taxes on notional rent, as the second home is deemed to be let-out by the Income-Tax Act, this budget has proposed some changes to cheer him up.

How this budget would impact your pocket, can be understood with the following scenario:

Ms. Shivi, a salaried class taxpayer, earns taxable salary income of Rs 10 lakh both in the Financial Year 2018-19 and 2019-20. She has two houses — one in Delhi and another in her home town Jaipur — but she stays in her Delhi house. She has to assume that one of the houses is deemed let-out (at Rs 30,000 per month) as Income-Tax Act allows a taxpayer to assume only one house as his/her self-occupied house property. If she plans with a little care, after considering the proposals made in the Interim Budget, she can eventually reduce the tax liability on her total income to almost nil.